State v. Bruce , 106 Mont. 322 ( 1938 )

I was not able to agree with the majority opinion on the prior application for a writ of mandate wherein the same questions were involved as are here presented. (State ex rel. Board ofCounty Commrs. v. Bruce, 104 Mont. 500, 69 P.2d 97.) I then took the view that section 25.1, Revised Codes, is the controlling statute. Decisions by the Supreme Court of the United States rendered since the decision in the Bruce Case demonstrate conclusively that section 25.1 is the controlling statute. That court has now held that the transfer by a state of exclusive jurisdiction rests upon a grant, and that such a grant may be accepted or declined. (Silas Mason Co. v. Tax Com.,302 U.S. 186, 58 Sup. Ct. 233, 82 L. Ed. 154; Atkinson v. TaxCom., 302 U.S. 641, 58 Sup. Ct. 419, 82 L. Ed. 440.) That was simply another way of saying that there must be a meeting of the minds of the grantor and grantee. There must be a voluntary grant by the one and acceptance by the other before exclusive jurisdiction is vested in the latter.

The intention of the state of Montana is expressed in section 25.1, which reads: "That consent to purchase or condemn all necessary lands is hereby given and concurrent jurisdiction shall be, and the same is hereby, ceded to the United States over the Fort Peck Dam, the body of water or artificial lake created by such dam, the land under such body of water, and any lands now owned or which may be hereafter acquired by the United States and which shall touch such body of water, all such being situated in the counties of Valley, Phillips, McCone, Garfield, Petroleum and Fergus, State of Montana, saving, however, to the said state the right to serve civil or criminal process within the limits of the territory over which jurisdiction is so ceded in any suits or prosecutions for or on account of rights obtained, obligations incurred, or crimes committed in said state, within or without said territory, and saving further to the said state the right to tax persons and corporations, their franchises and property within said territory, and reserving further to the said state and its inhabitants, citizens, and non-residents the right to fish or hunt by boat or otherwise, and the right of access, ingress and egress to and through said ceded territory to all persons owning or controlling livestock for the purpose of watering the same, and saving further to the state jurisdiction in the enforcement of the state laws relating to the duties of the livestock sanitary board, and the state board of health, and the enforcement of regulations promulgated by said boards in accordance with the laws of said state; provided, however, that jurisdiction shall not vest until the United States, through the proper officers, notifies the governor of the state of Montana that they assume police or military jurisdiction over said territory."

The section expressly treats of the Fort Peck area and none other. It was approved and became effective on January 17, 1934. The grant thus made was accepted on October 10, 1934, by letter of the Acting Secretary of War, who pursuant to the requirement of section 25.1 notified the Governor of Montana that the lands indicated on a map which he inclosed with his letter were in the possession of the United States, and in which he stated in part: "The nature, character and extent of the work at the locality is such that the United States must now assume police jurisdiction over the lands thereinbefore described. It is my duty, therefore, to issue instructions to the federal officials in charge of the work that they shall assume complete and exclusive jurisdiction over these lands. I shall appreciate your co-operation in so advising the officials of your state." The lands embraced the area here involved.

We need not here indulge in any presumption regarding the acceptance of the grant. The letter of October 10, 1934, written long after the passage of section 25.1, shows acceptance of the grant under section 25.1, and there is nothing to indicate acceptance of a supposed grant under section 25. The controlling statute being section 25.1, the state's right to tax personal property in private ownership situated thereon is conceded by all the parties, since the state has the right to qualify its consent to purchase or its grant of jurisdiction, as it has in section 25.1. (James v. Dravo Contracting Co., 302 U.S. 134,58 Sup. Ct. 208, 82 L. Ed. 125.)

The time when the government acquired ownership of the lands, under the reasoning of the recent opinion of the United States Supreme Court cited above, becomes immaterial. The test is, When did the United States Government accept the grant of exclusive jurisdiction over the area? The answer is on October 10, 1934, when it accepted the grant and there came about a meeting of the minds of the two contracting governments.

My associates are falling into the same error here as they did in the Bruce Case, supra, by holding in line with the case ofState v. Tully, 31 Mont. 365, 78 P. 760, 3 Ann. Cas. 824, that the purchase by the United States, with the consent of the state, ipso facto brought the lands within the exclusive jurisdiction of the United States. The federal court refused to adhere to the rule announced in the Tully Case. (UnitedStates v. Tully, (C.C.) 140 Fed. 899.) The United States Supreme Court, in the recent cases above cited, in effect exploded that doctrine completely.

My associates point out at length what the United States is doing in the way of exercising exclusive jurisdiction over the area in the matter of furnishing fire and police protection, school facilities, and the like. All of this was accomplished after the passage of section 25.1 and, together with the letter of October 10, 1934, undoubtedly shows an acceptance of the grant, but under section 25.1, and not under section 25.

My associates say, "We now adopt the rule of decision as announced by the Supreme Court of the United States [meaning as announced in the three recent decisions], and expressly modify our former decision in this respect." As I read the majority opinion, it makes this declaration of purpose to follow the recent decisions of the United States Supreme Court, and then proceeds to do the exact opposite.

If, as the majority hold, because the United States commenced the laying out of the town of Fort Peck before the passage of section 25.1, there was an acceptance of the grant of exclusive jurisdiction, and if, as they hold, because of the case ofHurley v. Kincaid, 285 U.S. 95, 52 Sup. Ct. 267,76 L. Ed. 637, the mere commencement of work in carrying out a proposed government project constitutes a purchase of the lands threatened to be invaded by the project (points which I do not concede), then the attempt in the Bruce Case to restrict the operation of the opinion to only a part of the area involved in the Fort Peck project was and is futile. The logical conclusion from the majority opinion is that section 25.1 has absolutely no application to any of the area contemplated by its terms.

If the majority opinion here is correct, then the attempt by section 25.1 to reserve the right in citizens of Montana to fish and hunt on the territory involved is also an idle gesture. A person holding a Montana fishing license, when caught fishing in the proposed lake, will be met with the assertion that "your license is good only in Montana. This body of water is no longer a part of Montana."

But it may be said that the United States will not become interested in that question; that, even if it has the power to regulate fishing and hunting, it will not do so. History teaches that the federal government does not permit many of its powers to lie dormant. It exercises about all of the powers it possesses, and some that it does not. A notable example is that of the Federal Motor Carrier Act of 1935 (49 Stat. 543, 49 U.S.C.A., sec. 301 et seq.), whereby the federal government, without the consent of the states, undertakes to regulate, control, and supervise the use of state-owned highways as a place on which to engage in interstate commerce. It possesses about as much authority to do so as the state of Montana has to regulate, supervise, and control the use of federal-owned highways in intrastate traffic through and across Fort Missoula and Fort Peck without the consent of the United States.

As before stated, I think section 25.1 is controlling here, and that the exclusive jurisdiction of the United States is subject to the reservations therein contained.

Let us revert to section 25. It contains this proviso, "provided, that an accurate map or plat and description by metes and bounds of said land shall be filed in the office of the county clerk and recorder of the county in which the same are situated, and if such lands shall be within the corporate limits of any city, such map or plat shall also be filed in the office of the city clerk of said city." In the Bruce Case the majority held that the word "provided" means "and." If that is so, it would still have to be held that there is no acceptance of the grant of exclusive jurisdiction by the United States until the acceptance is manifested by the filing of that map. I think a liberal construction of section 25 requires a holding that there is no acceptance of the grant without the filing of the map. Otherwise, the clause is given no meaning at all. In my opinion, all of the evidence points to the conclusion that section 25.1 and not section 25, is controlling.

Moreover, even if section 25 is the controlling statute here, I fail to see wherein the state is invading the exclusive jurisdiction of the United States by taxing personal property in private ownership situated on the area here involved. It is true that the cases of Surplus Trading Co. v. Cook, 281 U.S. 647,50 Sup. Ct. 455, 74 L. Ed. 1091, and Standard Oil Co. v.California, 291 U.S. 242, 54 Sup. Ct. 381, 78 L. Ed. 775, and prior cases of like import, sustain the view that the state has not that right. But the three recent decisions of the United States Supreme Court have greatly modified all prior opinions. In my opinion, the Surplus Trading Company and the Standard OilCases are erroneous and should be overruled. They, and prior cases, hold that when the United States purchases places with the consent of the state, it withdraws such area from the state and creates a separate province or country. If that is the meaning of clause 17, section 8, of Article I, of the United States Constitution, then it would not be competent for Congress to say otherwise. If the Constitution commands one result, Congress cannot prescribe another. If the Constitution declares that purchase and consent withdraw the place from the state, then it is not competent for Congress or any other federal officer to accept the grant on any other basis.

The constitutional provision in question should be given its ordinary meaning. It should be construed so as to carry out its purpose. It was intended to avoid clashes or conflicts between the United States and the respective states as to the extent of authority of each. If the two governments involved were satisfied with the division of authority between them, it was never contemplated that an individual could question the arrangement and assert rights or exemptions growing out of the exclusive legislation of the United States. In other words, occasionally Congress possesses powers which it has not seen fit to exercise, and in such a situation the states are free to act. (Compare South Carolina State Highway Department v. BarnwellBros., 303 U.S. 177, 58 Sup. Ct. 510, 82 L. Ed. 469, and cases therein cited, decided by the United States Supreme Court on February 14, 1938.)

Did the framers of the Constitution intend that the mere purchase of property by the federal government, with the consent of the state, for needful buildings, automatically created a separate province, country, or territory having an autonomous existence such as the District of Columbia, and did they intend that such area should be carved out and excluded from the state in which situated? I think not. If that were intended, apt language could easily have been employed. Unless this area has been excluded from the state of Montana, personal property in private ownership situated thereon is taxable. (Forbes v.Gracey, 94 U.S. 762, 24 L. Ed. 313.) If the Constitution means what the United States Supreme Court in its earlier decisions has said it means, then it would not be competent for Congress to authorize a purchase of property for needful buildings by consent of the state without excluding the area from the state in which it is located. Congress, however, has undertaken to prescribe a different rule relative to purchasers under the Resettlement or Rural-Rehabilitation Projects. This enactment is found in 40 U.S.C.A., section 431, reading: "The acquisition by the United States of any real property acquired before or after June 29, 1936, for any resettlement project or any rural-rehabilitation project for resettlement purposes constructed before or after June 29, 1936, with funds allotted or transferred to the Resettlement Administration pursuant to the Emergency Relief Appropriation Act of 1935, or any other law, shall not be held to deprive any State or political subdivision thereof of its civil and criminal jurisdiction in and over such property, or to impair the civil rights under the local law of the tenants or inhabitants on such property; and insofar as any such jurisdiction has been taken away from any such State or subdivision, or any such rights have been impaired, jurisdiction over any such property is hereby ceded back to such State or subdivision." Obviously, if the Constitution says one thing and Congress the exact opposite, the congressional utterance must fall. Section 431 cannot possibly stand if the Constitution means what the court in its earlier decisions has said it means.

I concede that the United States has exclusive legislation over the area in question here as the Constitution commands, but I do not agree that its jurisdiction or authority is invaded by taxing personal property owned by private individuals and situated on such lands when the tax in no way affects, hinders, or impedes the government of the United States in carrying out the purposes for which the lands were acquired, as here, and this whether section 25 or section 25.1 is controlling.

Under the laws of Montana a tax upon personal property is a lien upon the real estate of the owner. (Sec. 2153, Rev. Codes.) To effect the collection of a personal property tax it may be, and usually is, unnecessary for the taxing officers to go near the property assessed. There need not be any invasion of the jurisdiction of the federal government. If it be necessary to serve civil process to effect a collection of the tax, that right is reserved under section 25, and there is no showing here made that such a procedure would be "incompatible with the cession" made under section 25. At any rate, the United States government, and not the taxpayer, should complain when that is attempted. Under our statutes personal property is taxable as of 12 o'clock noon on the first Monday of March. (Secs. 2002, 2003, Rev. Codes.) Ownership of personal property situated in Montana at 12 o'clock M. on the first Monday of March determines its taxability by the state. If a band of sheep grazing near the Fort Peck area, either with or without permission of the officers in charge at Fort Peck, is driven through the Fort Peck area on the first Monday of March and in such a manner that at 12 o'clock noon on that day the entire band is on that area, and ten minutes thereafter the sheep are removed therefrom and never again enter it, they are not taxable for that year according to the earlier United States Supreme Court decisions, upon the ground that at noon on the first Monday in March of that year they were not in Montana. I cannot subscribe to that view.

I can see no real difference, in principle, between this case and that of Cosier v. McMillan, County Treasurer, 22 Mont. 484,56 P. 965, and I believe we should hold that the property in question here is taxable even though section 25 be held to be the controlling statute.

I admit that, if section 25 is the controlling statute, then my views are at variance with the Surplus Trading Company Case and the Standard Oil Company Case, and other early decisions of the United States Supreme Court. However, as noted above, those early cases have been modified by the last three decisions of that court, and in my opinion should be completely overruled.

Ordinarily, I would be reluctant to depart from or express views at variance with the holding of the United States Supreme Court, but since the decision in the case of Mountain StatesPower Co. v. Public Service Com., 299 U.S. 167,57 Sup. Ct. 168, 81 L. Ed. 99, I have no hesitancy in so doing. By that decision the United States Supreme Court held with remarkable brevity that its condemnation of a state statute is not binding on state courts; it declared that its condemnation of a state statute is not authoritative condemnation; it held that what it says concerning one statute is not controlling as to another meaning exactly the same, but containing a different Code number; it found that the federal court was warranted in entering a restraining order contrary to the state statute, which statute was just as obligatory upon the federal as upon the state courts (25 C.J. 828, 829, note 52), on the theory that the state statute was unconstitutional as denying an essential remedy, but that the state courts were free to declare the state statute valid notwithstanding its pronouncement to the contrary. It invited the state courts to speak independently and uninfluenced by what it had said on a given subject. Moreover, the state courts remaining silent, it (the United States Supreme Court) will presume that, had the state court spoken, it would have done so on the side of error. (Compare analysis of that opinion in 50 Harvard Law Review, pp. 813-818.) On the strength of this invitation to speak, as one member of this court, I have no hesitancy in expressing my disapproval of the Surplus TradingCompany and the Standard Oil Company Cases.

I have given no consideration to the questions of resjudicata or stare decisis, as they are not treated in the majority opinion. Making the same assumption regarding these questions as do the majority, I think the writ applied for should issue.

Cause taken to Supreme Court of the United States by writ of certiorari June 9, 1938.